PRECIOUS-Gold eases as Greek debt worries dent euro

* US Q1 GDP unrevised at annual rate of 1.8 percent

* US jobless claims unexpectedly rise to 424,000 last week

* Euro/gold leads decline as euro takes a hit

* China gold consumption expected to rise-GFMS

* U.S. commodity markets closed Monday for Memorial Day

(Updates with closing, late prices.)

By Carole Vaporean and Amanda Cooper

NEW YORK/LONDON, May 26 (Reuters) - Gold finished lower on Thursday, led by a drop in euro-priced bullion after the single European currency came under sudden pressure on heightened concerns over euro zone debt issues, although safe-haven buying limited its declines.

The euro fell early, with traders citing a report quoting the Euro Group's Jean-Claude Juncker as saying the International Monetary Fund may not release its next tranche for Greece on June 29. [ID:nLDE74P1Z2] [USD/]

The euro surrendered most of its gains against the U.S. dollar, after earlier climbing above $1.42 on a news report that China is interested in buying bailout bonds for Portugal.

Spot gold trimmed its decline to $1,520.40 an ounce, from the two-day low at $1,514.34 hit earlier. On Wednesday, bullion prices rose to $1,532.10 their strongest since May 4.

The upward trend established since a commodities sell-off earlier this month, however, remained intact, analysts said.

Benchmark COMEX June gold futures also pared earlier losses to settle down $3.90, or 0.26 percent, at $1,522.80 per ounce. Earlier, the contract slipped to a two-day low at $1,514.60. It reached its highest since May 4 on Wednesday.

"Market sentiment towards gold has become more positive over the past few days, as illustrated by the resumption of net inflows into ETFs," said BNP Paribas analyst Anne-Laure Tremblay.

"I believe that the gold price will trend higher from its current levels in 2011," she said, adding the other key drivers of the gold price this year were still present.

Gold has risen by more than 7 percent so far this year, in dollar terms, fueled by investor concern over the euro zone debt burden, violence in the Middle East and the fragility of the U.S. economic recovery.

While the euro zone debt issues overshadowed U.S. economic concerns, gold found additional support from unexpectedly weak consumer spending data that hobbled the U.S. economy in the first quarter, as well as fresh signs of a slowdown in job creation. [ID:nN26233734]

First quarter U.S. gross domestic product growth was unrevised at annual rate of 1.8 percent, and new U.S. claims for jobless benefits unexpectedly climbed to 424,000 last week. [ID:nN26234110] [ID:nCAT005446]

Euro-denominated gold slid by about 0.7 percent on the day, but held at 1,075.57 euros by session end, and was still near a record at 1,088.11 an ounce struck on Wednesday.

"We are in for a prolonged period of prices treading water and probably stagnating at around $1,500. I wouldn't be looking for as much positive dynamic going on, despite the demand for it as a safe haven right now being fueled by the debt crisis," said Commerzbank analyst Eugen Weinberg. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

For more precious metals coverage, join the Reuters Global Gold Forum. Contact Sapna Pajpani sapna.pajpani@thomsonreuters.com or Angela Bulgari angela.bulgari@thomsonreuters.com for details ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

SILVER VOLATILITY

Spot silver fell to a low of $36.36 an ounce before recovering to $37.27 by day's end, down from Wednesday's close at $37.88 an ounce.

Silver touched a record at $49.51 in late April before falling sharply on a broad sell-off in commodities and after exchange operators in Shanghai and New York raised the amount of money required to trade silver futures.

The CME Group may bring down margins over time once market volatility eases, Harriet Hunnable, CME managing director for metals products, told Reuters in an interview.

CME, operator of the world's leading energy, grain and precious metal markets, hiked trading margins for silver five times over a two-week period up to May 9 by a total of about 84 percent. [ID:nL3E7GQ0D5]

"We still think that concerns about the ability of the EU to manage Greece's sovereign debt problems and potential contagion to other peripheral countries will be supportive for gold," said Natalie Robertson, commodities strategist at ANZ.

Silver ETFs continue to leak metal. Holdings have fallen by nearly 9 million ounces this week alone, bringing year-to-date outflow to 8.4 percent, or 42.79 million ounces. [GOL/ETF]

Bullish for gold was metals consultancy GFMS' estimate that China could import as much as 400 tonnes of metal this year, compared with 200 tonnes last year when it ranked as the world's second-largest consumer after India. [ID:nB9E7EK00F]

Among other precious metals, platinum was down at $1,766.50 an ounce from Wednesday's close at $1,776.70, while palladium was up at $750.99 from $745.13 previously. Prices at 3:13 p.m. EDT (1913 GMT)

LAST/ NET PCT YTD

CLOSE CHG CHG CHG US gold 1522.80 -3.90 -0.3% 7.1% US silver 37.330 -0.312 0.0% 20.7% US platinum 1778.10 -1.70 -0.1% 0.0% US palladium 757.20 9.85 1.3% -5.7% Gold 1520.00 -3.30 -0.2% 7.1% Silver 37.11 -0.77 -2.0% 20.3% Platinum 1768.24 -8.46 -0.5% 0.0% Palladium 752.47 7.34 1.0% -5.9% Gold Fix 1518.50 -3.00 -0.2% 7.7% Silver Fix 36.95 -22.00 -0.6% 20.6% Platinum Fix 1779.00 2.00 0.1% 2.8% Palladium Fix 755.00 8.00 1.1% -4.6%

(Additional reporting by Lewa Pardomuan in Singapore; Editing by Lisa Shumaker and Sofina Mirza-Reid)